The Washington Post has an interesting article about the Red Cross borrowing $340 million dollars to cover the costs of its Disaster Relief Fund.
That’s curious because the article goes on to say that the Red Cross has plenty of money; they just need to divert funds from other operations.
Says the paper:
Daniel Borochoff, president of the American Institute of Philanthropy, which monitors how charities spend their money, said that based on the organization’s most recent IRS reporting form, it has $700 million on hand to use.
“For them to claim that they have nothing is not being very responsible,” he said. “They have funds available for a disaster, even if it is not in the Disaster Fund.”
The Red Cross did a poor job of disagreeing with Mr. Borochoff. The paper reports:
But yesterday, the Red Cross disputed that assessment. “We have [the funds] as a resource, but it needs to be spent on what it’s designated to be spent on,” Martin, the spokeswoman, said.
I’ve written before about the Red Cross before when they mistakenly reported that they overstated the number of evacuees in hotels because of Hurricane Katrina by 400,000 people.
I also noted that the Red Cross expects to be reimbursed by FEMA for the $250 million they project the motel program will cost.
So bottom line: it appears the Red Cross has $700 million right now; it wants to borrow an additional $340 million dollars; and it expects to be reimbursed by FEMA for $250 million.
All this while it’s being criticized for its poor handling of large disasters like the recent hurricanes.
Someone should closely examine how things are being run in that organization. As a front-line responder in national disasters, the Red Cross needs to be the shining star in terms of emergency relief. The training and philosophy to be the best needs to come from the top of the organization.
Keeping the organization financially sound is also important and borrowing $340 million when you have $700 million in funds and expect to receive another $250 million leaves one to wonder who is making these decisions.
If they want to continue their worldwide status as the premier agency in terms of disaster relief, the Red Cross needs bright, dedicated, energetic and thoughtful leadership. It’s important we be sure that have that leadership.
If the Red Cross wants to continue making missteps during national emergencies, they may want to consider hiring an expert at stumbling and bumbling.
I hear that the former director of FEMA, Michael Brown, only has another 30 days left in his job (if they don’t hire him on for longer again).
